Travis County isn’t giving up on collecting tax dollars on a potential Major League Soccer stadium that the Austin City Council waived in a deal approved last week.
As part of the agreement struck Aug. 15 to build a $200 million, 20,000-seat stadium in North Austin, the City Council and Precourt Sports Ventures agreed the facility would not produce property tax revenue. Under the deal, the city would own the land and stadium and lease them to Precourt.
On Tuesday, Travis County commissioners unanimously voted to “authorize the county attorney to preserve the county’s right to challenge the tax-exempt status of the stadium company’s use of city property.”
They also voted to “pursue negotiations with the city and other local taxing entities on expectations for preserving taxable value in the redevelopment of publicly owned real estate.”
Government ownership doesn’t guarantee that the $200 million stadium would be tax-exempt. The Travis Central Appraisal District will make that call based on whether the facility serves a public purpose as delineated by state law.
The terms of the stadium deal include as grounds for termination any decision by the district, the Travis Appraisal Review Board, a court or government body that the stadium is not tax-exempt.
The appraisal district has not yet started its review of the property, but Travis County commissioners could make their views known while the district is evaluating the property or file an appeal afterward if the district grants the exemption.
The terms sheet is sprinkled with the phrase “public purpose,” which appears half a dozen times.
“The Stadium will be owned by the City and used for the enjoyment, health, comfort, and welfare of the public,” it states under a section on property taxes.
The terms also say the city will “reasonably cooperate” with Precourt in asserting its right to the tax exemption and acknowledges the possibility of a challenge.
It states the company and affiliates have the right to “assert, insist upon, continue, and restate this intent in any agency, forum, or court having jurisdiction and at which the question may arise or be presented.”
City Council Members Ellen Troxclair and Leslie Pool on Wednesday said they understand why county commissioners have raised questions about forgoing property taxes on the stadium.
“I’m not surprised that other taxing entities have an interest and potentially a problem with the city of Austin making a decision that will lead to a loss of potential future revenue,” said Troxclair, the council’s sole conservative member. “Some of my colleagues and I raised similar concerns that other important partners who will be affected were not at the table during council’s conversations.”
Mayor Steve Adler, who championed efforts to relocate the Columbus Crew SC franchise to Austin, said the city “found great public use community benefit for having a Major League Soccer team. I don’t know if the county considered that benefit or not.
“Regardless, the city did not give any tax exemption to the soccer team. Taxes are generally not owed by private companies operating public use facilities,” he said.
Asked if the county commissioners’ vote Tuesday jeopardized the city’s deal with PSV, Adler said, “I don’t know that, but I do know that the agreement says the team is responsible for any such taxes, not the city.”
Travis County spokesman Hector Nieto said staff members would be reaching out to other local taxing entities, which include the Austin school district, county health district and Austin Community College, in the coming days.
“At this time, ACC does not have the appropriate background information on this project to provide an informed comment,” said Jessica Vess, an ACC spokeswoman, on Wednesday night. “The college trusts that properties will be taxed accordingly as defined by law and recognizes this determination rests with the Travis County Appraisal District.
Jacob Reach, chief of staff for the Austin school district, said Thursday that the district had not yet been contacted by the county.
“We would need to ensure that we have appropriate notice so that we could discuss this further with our board,” Reach said.
Central Health spokesman Ted Burton said Tuesday night that the Travis County health district had not yet been contacted by the county. “We would need to talk to our attorney before we could comment,” Burton said.
County Commissioner Brigid Shea, in whose precinct the stadium would be built, said she first raised the issue because she believes tax exemptions should be offered only in circumstances when a development has a clear public benefit, such as affordable housing.
“I don’t think that any entity should negotiate away basically property taxes for a for-profit corporation when there is not an absolute necessity,” Shea said in an interview after the meeting.
“The owners of the soccer team, the MLS team, are not in it for charitable purposes. They’re in it because it’s an extremely lucrative business,” she added. “We are not a backwater location for a soccer franchise. We shouldn’t be having to cut deals to subsidize a team coming here.”
Nieto said the city never reached out to Travis County during its negotiations with Precourt.
“I think it just comes down to political will,” Shea said. “We think our sibling governmental partners should act as real partners and not make deals that we learn about the tax impact to us essentially after the fact.”
Pool, whose District 7 includes the site of the proposed stadium, said she noticed that during the city’s negotiations with PSV, city staffers “weren’t reaching out to the other taxing entities and it struck me as unusual, considering the controversy surrounding the taxing issue.”
“I appreciate Travis County’s concerns, and I suspect the school district officials, the trustees, would share those concerns as well as Central Health and the community college. It is not just publicly owned land, it is land the city of Austin is giving away to a for-profit private corporation with no expectation of revenue for the other entities,” she said.
American-Statesman staff writer Philip Jankowski contributed to this story.
Editor’s note: This story has been updated with comments from an Austin Community College spokeswoman and an Austin school district official.